SoundHound AI recently reported strong financial results for the fourth quarter of CY2025, with shares seeing an increase. The voice AI company announced revenue of $55.06 million, marking a 59.4% year-over-year increase and surpassing analyst estimates by 2.3%. Another report indicated Q4 revenue at $17.0 million, also beating predictions of $16.7 million. The company's GAAP loss was $0.03 per share, significantly better than expected. SoundHound AI, which develops voice assistant features for products and services, has demonstrated a 68% compound annual growth rate in sales over the last four years, reflecting robust customer demand.
Despite individual successes, the broader AI market shows signs of cooling, particularly after Nvidia's strong earnings report failed to prevent a "sell-the-news" reaction. Nvidia's stock, along with other AI-related companies like AMD, ASML, and Broadcom, experienced declines, contributing to a negative sentiment across U.S. stock indices such as the S&P 500 and Nasdaq composite. This trend, coupled with inflation fears and a larger-than-expected rise in producer prices, suggests investors are rotating out of risky AI names into companies with more solid fundamentals, leading to a "risk-off" sentiment.
The AI economy faces critical challenges beyond compute power, specifically in power availability and thermal management for data centers, especially with Nvidia's upcoming Blackwell GPUs requiring significantly more energy. Bloom Energy is positioned as a key solution for 2026, offering onsite power generation through solid oxide fuel cells to accelerate power delivery for AI data centers. Meanwhile, major institutions like HSBC are making substantial investments in generative AI, providing 85% of employees with access to tools that have made engineers five times faster at patching vulnerabilities and exploring AI for process improvements like fraud detection.
Concerns about AI disrupting software businesses are beginning to ease, partly due to a partnership between AI startup Anthropic and Salesforce, which has helped calm market anxieties. This collaboration suggests AI is increasingly viewed as a potential enabler rather than solely a threat for some software companies. Globally, Asia is emerging as a crucial "foundry" for AI hardware, with the MSCI Asia Pacific Index outperforming the S&P 500 and South Korea's Kospi index surging due to its role in memory chips and AI manufacturing, indicating a significant eastward shift in capital expenditure for AI technology.
Key Takeaways
- SoundHound AI reported Q4 CY2025 revenue of $55.06 million, a 59.4% increase year-over-year, and a GAAP loss of $0.03 per share, exceeding analyst expectations.
- Another report stated SoundHound AI's Q4 revenue was $17.0 million, beating analyst predictions of $16.7 million, with a loss of $0.07 per share.
- The broader AI sector is experiencing a cooling trend, with Nvidia's strong earnings failing to prevent a "sell-the-news" reaction and declines in AI-related stocks like AMD.
- U.S. stocks are underperforming international markets, partly due to investor anxiety around AI-linked stocks and inflation fears.
- The AI economy faces significant challenges in power availability and thermal management for data centers, especially for Nvidia's Blackwell GPUs.
- Bloom Energy is identified as a top stock pick for 2026 due to its solid oxide fuel cells providing onsite power generation for AI data centers.
- HSBC is making substantial investments in generative AI, providing 85% of its employees with access to tools that have boosted productivity, including making engineers five times faster at patching vulnerabilities.
- Fears of AI disrupting software businesses are subsiding, partly due to a partnership between AI startup Anthropic and Salesforce.
- Asia is becoming a major "foundry" for AI hardware manufacturing, with the MSCI Asia Pacific Index outperforming the S&P 500 and South Korea's Kospi surging.
- Investors are rotating out of risky AI-related names into companies with solid fundamentals and better valuations, indicating a shift in market dynamics.
SoundHound AI beats sales expectations in Q4 CY2025
SoundHound AI, a voice AI company, reported better-than-expected sales for the fourth quarter of CY2025, reaching $55.06 million, a 59.4% increase from the previous year. The company's GAAP loss was $0.03 per share, which was significantly better than analysts' predictions. SoundHound AI's technology helps businesses create voice assistant features for their products and services. The company has seen strong revenue growth over the last four years, with sales increasing by 68% annually. Despite some inefficiencies in customer acquisition costs this quarter, the company's performance exceeded expectations.
SoundHound AI shares rise after strong earnings report
SoundHound AI (NASDAQ:SOUN) saw its shares increase after announcing its fourth-quarter earnings. The company reported a loss of $0.07 per share, beating analyst expectations of a $0.08 loss. Revenue for the quarter was $17.0 million, also surpassing the $16.7 million analysts predicted. For the full year, SoundHound AI reported a loss of $0.30 per share and revenue of $65.0 million, up from the previous year. The company is a leader in voice AI technology, used in various applications like cars and smart home devices.
SoundHound AI exceeds sales targets in Q4 CY2025
SoundHound AI reported strong fourth-quarter CY2025 results, with revenue of $55.06 million, beating analyst estimates by 2.3% and showing a 59.4% year-over-year increase. The company's GAAP loss was $0.03 per share, significantly better than the expected $0.10 loss. SoundHound AI also saw a substantial improvement in its operating margin, reaching 77.3%. The company's sales have grown at an impressive 68% compound annual growth rate over the last four years, indicating strong customer demand for its voice recognition and conversational intelligence technology. Despite a negative free cash flow this quarter, the overall financial performance was strong.
Bloom Energy is top AI stock pick for 2026
The AI economy faces significant challenges not in compute power, but in power availability and thermal management for data centers. Nvidia's upcoming Blackwell GPUs will require much higher power, straining current infrastructure. Bloom Energy is identified as the top stock pick for 2026 because its solid oxide fuel cells provide onsite power generation, reducing reliance on the grid. This technology helps accelerate power delivery for AI data centers. The I/O Fund previously invested in Bloom Energy in April 2025, seeing significant gains. Bloom Energy's solutions are crucial for meeting the urgent power demands of the AI boom.
AI trade cools as Nvidia earnings fail to lift market
Nvidia's strong earnings report did not prevent a sell-the-news reaction, highlighting a cooling in the AI sector. While the overall market showed resilience with many stocks closing higher, investors are rotating out of risky AI-related names into companies with solid fundamentals and better valuations. This shift indicates a change from expensive tech stocks being safe havens to a more stock-picker's market. Despite fears of an AI bubble, a full market crash has not occurred. The current market dynamic suggests a rotation is underway, creating opportunities for investors to find undervalued companies.
US stocks lag as AI anxiety grows
U.S. stocks are underperforming compared to international markets, with indices like the FTSE 100, STOXX Europe 600, Nikkei 225, and KOSPI showing stronger gains. This trend is attributed to 'AI derangement syndrome,' where investor skittishness around AI-linked stocks is dragging down the entire U.S. market. Nvidia's stock, despite strong earnings, has seen declines, contributing to a negative sentiment. Analysts suggest that AI's potential to disrupt business models could lead to economic slowdowns. Mentions of AI on corporate calls have also decreased, indicating a shift in corporate communication strategies.
HSBC names generative AI a top investment area
HSBC has identified generative AI as a key investment area, planning to use the technology for employee support, process improvements, and enhancing customer experiences. CEO Georges Elhedery stated that generative AI is receiving the most significant investment in new technology today. The bank has provided 85% of its employees with access to generative AI tools to boost productivity, with coding assistance tools reportedly making engineers five times faster at patching vulnerabilities. HSBC is also exploring AI for redesigning processes like fraud detection and credit applications, aiming to create a more productive, efficient, and secure banking environment.
S&P 500 drops amid inflation fears and AI stock worries
U.S. stocks declined as a 'risk-off' sentiment took hold, influenced by a larger-than-expected rise in producer prices that signals persistent inflation. This data suggests the Federal Reserve may delay interest rate cuts. Nvidia's recent stock drop, despite strong revenue, has fueled anxiety about the AI trade. Block's significant workforce reduction, citing AI productivity gains, also contributed to market concerns. While some sectors like energy saw gains, the overall market sentiment was negative, with financials and tech leading the decline.
Nvidia earnings fail to lift S&P 500 as AI stocks stumble
The S&P 500 finished lower as Nvidia's shares pulled back after a strong earnings report, causing significant losses in many artificial intelligence-related stocks like AMD, ASML, and Broadcom. The Nasdaq composite saw the largest decline, while the S&P 500 and Dow Jones also finished in negative territory. Investors are showing caution regarding AI stocks, despite Nvidia's performance. Upcoming inflation data is also a key focus for the market.
AI disruption fears subside for software stocks
Concerns that artificial intelligence would disrupt software businesses appear to be easing. A partnership between AI startup Anthropic and Salesforce has helped calm market panic, which had previously caused software vendors' market value to drop by hundreds of billions of dollars. This development suggests that AI may now be seen as a potential savior for some software companies rather than solely a threat.
Asia leads AI trade as foundry, not just Silicon Valley
Asia is emerging as a major player in the AI revolution, not just as a consumer but as a crucial 'foundry' for hardware. The MSCI Asia Pacific Index has seen its strongest February since 1998, outperforming the S&P 500. South Korea's Kospi index has surged significantly year-to-date, reflecting its importance in memory chips and AI hardware. This trend indicates a migration of capital expenditure eastward, with Asia controlling a significant share of the manufacturing for AI technology. While the US focuses on software and code, Asia is responsible for producing the essential hardware, positioning it as the engine room of the AI rally.
Cramer identifies stocks at risk from AI disruption
Jim Cramer and Jeff Marks are discussing which tech stocks are most vulnerable to disruption from artificial intelligence. In their February Monthly Meeting, they will identify companies truly at risk and those that are not. This analysis comes as many tech stocks have faced pressure this year due to fears about AI's impact on their businesses. The discussion will also include updates on all 33 stocks within their portfolio.
Sources
- SoundHound AI (NASDAQ:SOUN) Posts Better-Than-Expected Sales In Q4 CY2025
- SoundHound AI (NASDAQ:SOUN) Trading 5.4% Higher Following Strong Earnings
- SoundHound AI (NASDAQ:SOUN) Posts Better-Than-Expected Sales In Q4 CY2025
- My Top 2026 Stock Pick for the AI Boom
- The AI Trade Cracked, But the Market Didn't
- U.S. stocks are being battered by ‘AI derangement syndrome’ and CEOs are learning not to talk about it
- HSBC names generative AI a leading investment area
- S&P 500 Falls as Risk Off Prevails, Block Cuts Spur AI Anxiety
- S&P 500 Drops But Grips Key Level While Nvidia, AI Stocks Stumble; Inflation Data Next
- AI Crushed Software Stocks. Now It’s Saving Them.
- Asia is not chasing the US AI trade it is the foundry
- February Monthly Meeting: Cramer reveals stocks in danger of AI disruption
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